Canada's housing market: Dundee's Goodman bets on residential sector

One of Bay St.’s most famous names seems to think the housing market still has some legs to it.

Ned Goodman, chief executive of Dundee Capital Markets Inc., has made a move into the residential sector with the purchase of Sotheby’s International Realty Canada by one of his companies.

Mr. Goodman’s 360 VOX Corp. said it has entered into an agreement to acquire a group of real estate businesses in Canada known as Sotheby’s International Realty Canada, Sotheby’s International Realty Quebec, and Blueprint Global Marketing.

The group is involved in “listing, marketing and selling real estate” including condominium developments, attached and detached homes and resort properties, according to a release. The Blueprint Global Marketing arm works with the Sotheby’s International Realty network listing and selling international developments.

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Mr. Goodman, who owns 24% of 350 Vox, is said have helped shape the deal between 360 Vox and Sotheby’s, according to someone close to the deal.

Through his affiliate companies operating under the Dundee brand, Mr. Goodman has interests in commercial real estate around the globe but this is his first foray into the residential market. Sotheby’s high end residential brand could be a good match for Dundee Wealth, the Toronto-based firm’s wealth management arm.

The deal is for $3.65-million in cash and 54.25 million common shares of 360 VOX or about 27% of the issued and outstanding common shares of 360 VOX prior to the transaction.

A portion of the purchase price is subject to an earn out and the common shares are also subject to lock-up agreements for up to 12 months. A portion of the cash consideration will be placed in escrow for working capital and indemnification purposes.

The transaction is expected to close in early November 2012. As part of the deal, 360 VOX will enter into employment and non-competition agreements with Ross McCredie, the founder and chief executive for the businesses being acquired, and other senior management. Mr. McCredie becomes chief operating officer of 360 Vox and will sit on the board.

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